A UBO: what is it?
A UBO and the UBO register: what is that all about? Let's start at the beginning: the UBO is an Ultimate Beneficial Owner. If you are subject to the AML, you must screen this person and his ultimate beneficial ownership. Failing to do so means sanctions could be imposed. Curious about UBOs and your obligations in this regard?
What is an Ultimate Beneficial Owner (UBO)?
Basically, a UBO is a person who ultimately owns or controls more than 25% of the shares or voting rights of a company or otherwise exercises control over the company or its management. It depends on the legal form, as you can read below.
As for a B.V. (private limited company) and N.V. (public limited company), a UBO is the natural person who is directly or indirectly and for more than 25% economically entitled to the company, or the person exercising control. Listed companies are excluded.
As for foundations and associations, this is the natural person who directly or indirectly has an ownership interest of more than 25%, or who can exercise more than 25% of the votes in the event of an amendment to the articles of association, or who has actual control over the legal person.
As for a V.O.F. (general partnership), partnership, C.V. (limited partnership) and shipping companies, the UBO is the natural person who directly or indirectly has an ownership interest of more than 25%, or who can exercise more than 25% of the votes in the event of management acts and/or changes to the cooperation agreement.
In the case of a religious denomination, things are different. Here the UBO is the natural person appointed legal successor in the articles of association of the denomination upon its dissolution.
And what about natural persons with a smaller interest? They too can be deemed Ultimate Beneficial Owners. For example, in case they otherwise have ultimate control over a client.
In a trust, several persons must be deemed Ultimate Beneficial Owners. Like the founder and the trustees.
If you are subject to the AML, you must establish the identity of the UBO. Two criteria are important, aiming at the following:
- qualifying a UBO as a person.
- investigating and holding beneficial ownership or control of a client. This means control in the form of holding shares, voting rights, ownership interest or other resources.
What is the role of the UBO register?
The UBO register is managed by the Chamber of Commerce and is subject to the Trade Register Act. This register was created to prevent matters such as money laundering. Since 2020, it is mandatory to register UBOs in this register. Failing to do so means fines or sanctions might be imposed.
Which organisations in the Netherlands are required to register UBOs?
- Unlisted private and public companies
- Associations with limited legal capacity but with company and associations with full legal capacity
- Mutual insurance companies
- Foundations and cooperatives
- Partnerships, general partnerships and limited partnerships
- Shipping companies
- European Public Limited Companies (SE) and European Cooperative Societies (SCE)
- European Economic Interest Groups that have their registered office in the Netherlands (EEIG) according to their articles of association.
Do you also spend a lot of time on a Know Your Customer and Customer Due Diligence policy to comply with AML requirements? Despite the frustrations they may generate, the KYC principles are becoming increasingly important. RegLab helps organisations quickly, safely and easily comply with Know your Customer policy laws and regulations.
Themed file: fully prepared for the supervisor’s audit
This article is part of a number of articles and downloads that will help you prepare yourself for the supervisor’s visit. This content is based on a supervisor's FAQs during an audit. Do you want to be 100% AML-proof and ready for the supervisor’s visit? Find all FAQs in our Knowledge Centre.